Assured Guaranty, like all of Puerto Rico’s residents, is eager for
PREPA to be operated more efficiently and reliably. Along with many
other stakeholders, we have promoted operational improvements and a wide
range of reforms for years. It is long overdue for the Commonwealth, the
PROMESA Oversight Board, and creditors to agree on an experienced,
highly qualified manager able to impose order, transparency and
accountability on PREPA. Once that happens, a variety of new strategic
alternatives can be explored, including ideas such as those mentioned by
the Governor in his address yesterday.

As we continue to try to move forward constructively, all parties should
keep in mind that bondholders and monoline insurers are secured
creditors of PREPA. For years Assured Guaranty has offered forbearance
agreements, liquidity, and concessions as reflected in the Restructuring
Support Agreement (RSA) that was approved by two successive Puerto Rico
Administrations. Unfortunately, that RSA was rescinded by the Oversight
Board in contravention of PROMESA law and Congressional direction, a
matter that moved interaction from consensual to litigative.

Furthermore, when creditors had no option but to exercise their rights
under Commonwealth law to install a competent and professional
independent Receiver for PREPA who could implement sound, depoliticized
management and an effective long-term energy generation and transmission
strategy, both the Oversight Board and Commonwealth objected. A
qualified, experienced Receiver might have begun improvements many
months ago that could have given the electricity system more resilience
to withstand and recuperate from hurricanes. A respected Receiver could
have also acted as a credible coordinator of federal aid for PREPA.
Instead American citizens in Puerto Rico continue to suffer.

PREPA bonds are secured by a lien on the system revenues, and supported
by covenants and Puerto Rico law ensuring that rates must be sufficient
to cover all costs including debt service. Under PROMESA and the United
States Constitution, the system cannot be sold free and clear of the
lien on revenues unless the lien is discharged through full payment of
the bonds, there is adequate coverage of debt service after any sale of
assets, or the bonds are given the full value of their collateral
through a confirmed plan of adjustment. Rather than force litigation, or
operate in secrecy, we urge the Commonwealth and Oversight Board to
collaborate meaningfully with stakeholders on consensual plans.

Given recent and continuing revelations about PREPA – including the
apparent uncovering of unutilized restoration materials in a PREPA
warehouse, the infamous Whitefish contract, and other allegations of
impropriety – any new privatization partners or investors will rightly
first look at respect for the rule of existing law, and the credibility
and transparency of both Island leadership and the Oversight Board. We
continue to look forward to engagement from the Commonwealth and
Oversight Board to consensually help improve PREPA and the quality of
life of Puerto Rico residents.

Any forward-looking statements made in this press release reflect
Assured Guaranty’s current views with respect to future events and are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Such statements involve risks and
uncertainties that may cause actual results to differ materially from
those set forth in these statements. These risks and uncertainties
include, but are not limited to, those resulting from litigation, the
inability of stakeholders to reach consensual agreements, the inability
to replace current PREPA management, the inability of a future receiver
to improve PREPA operations and other risks and uncertainties that have
not been identified at this time, management's response to these
factors, and other risk factors identified in Assured Guaranty’s filings
with the Securities and Exchange Commission. Readers are cautioned not
to place undue reliance on these forward-looking statements, which are
made as of January 23, 2018. Assured Guaranty undertakes no obligation
to publicly update or revise any forward-looking statements, whether as
a result of new information, future events or otherwise, except as
required by law.